Mr. Tony O. Elumelu, Chairman, Board of Directors, said this recently during the bank’s Annual General Meeting (AGM) held in Lagos, while assuring shareholders that the bank’s diversified revenue base across the continent and improved yields on earning assets would drive the bank’s earnings going forward.
The bank’s first quarter result, covering the period January to March 2015, shows a significant 22 per cent growth in gross earnings to N83.1 billion as at March 2015 from a comparative figure of N68.1 billion made in the first three months of 2014.
Also, the bank recorded an even higher 36 per cent growth in profit before tax to N18.4 billion as at March 2015 compared to N13.5 billion as at March 2014. The bank’s profit after tax also grew by 35 per cent to N17 billion from N12.6 billion within the same period.
Elumelu said that the bank’s financial performance in the first quarter was a reflection of its resilience and a significant improvement on the 10 per cent earnings growth to N290 billion recorded in the 2014 financial year.
“Strong fee-based earnings from credit-related transactions, e-banking, remittances and trade services provided the impetus for non-interest income growth; in addition to the strong trading gains in the year,” said Elumelu.
He assured the shareholders that the bank would continue to strengthen its risk management and corporate governance capabilities to ensure effective mitigation of existing and emerging risk factors in its global operations. The bank, in the 2014 financial year, made a profit before tax of N56.2 billion while profit after tax grew modestly by three per cent to N47.9 billion, translating to N1.56 earnings per share. While explaining the bank’s dividend policy in the current financial year, Elumelu said it was guided by the need to be prudent and retain cash for the bank’s future expansion initiatives.
“Though UBA is adequately capitalised with capital adequacy ratios in excess of regulatory requirement, we proactively raised additional capital during the year to further boost our capital base and it would not have been prudent to pay so much dividend after raising capital from the market.
Shareholders should however expect higher dividend in the future,” said Elumelu.
In his own explanation of the drivers of the bank’s financial performance, Phillips Oduoza, the bank’s Group Managing Director/CEO, said it was the result of growing low cost deposits, enhanced customer service orientation within the bank, improving market share in the e-Banking space and the consolidation of the competitiveness of its African subsidiaries.
“In 2014, we defended our market share across Africa, despite intensifying competition and macroeconomic volatilities. UBA Africa continued to wax stronger, with increasing earnings contribution to the group. We grew our loan book by 14 per cent to cross the N1 trillion mark.
“We remained focused on creating quality assets as seen in the moderated impairment charge and overall cost of risk.
“We will leverage our competitive advantage inherent in our large customer base, vast geographical footprint, highly skilled workforce and cutting edge technology to continue to drive revenues,” said Oduoza.
Oduoza also explained that the steady growth trajectory in the bank’s operating income was a reflection of improving balance sheet optimisation, cross selling and product penetration, adding that despite the cost of doing business in Africa remaining relatively high and regulatory pressure constraining earnings in the year, the bank’s growth has a strong upside in the years ahead.
“Our African subsidiaries have witnessed a cumulative average growth rate of 14 per cent in the last three years and have more than doubled their profitability within the same period,” Oduoza said.
The bank, Oduoza added, has just completed upgrading its online banking platform, U-Direct, to bring about more stability, greater security and better user experience.
